Chicago | Reuters — U.S. lean hog futures were mixed on Wednesday, with the front-month contract easing on profit-taking after rallying to a three-month high while deferred contracts rose on expectations of tight supplies, traders said.
Live cattle contracts were firm following two straight days of declines with concerns about a massive U.S. storm system limiting animals’ weights.
“For cattle guys, this is a muddy mess,” Alan Brugler, president of Brugler Marketing. “The feedlots were already muddy from the snowmelt, now you are dumping a bunch of rain on top of it. The cattle aren’t performing very well; average carcass weights are down.”
Chicago Mercantile Exchange April live cattle rose 0.025 cents to 126.675 cents/lb. The June contract was up 0.65 cent, at 119.325 cents.
Technical buying also helped support live cattle contracts, which traded in negative territory during Wednesday’s session but turned higher after the April contract held support just above the five-week low hit on Tuesday.
Feeder cattle were weaker, with April shedding 0.275 cent to 144.125 cents/lb.
Wholesale beef prices were mixed. USDA quoted the choice cutout at $228.24/cwt, up two cents from Tuesday and its 10th day of gains. Select cuts fell $1.07, to $219.28. Chicago Mercantile Exchange April lean hogs eased 0.175 cent, to 63.475 cents/lb. The front-month contract hit its highest since Dec. 14 on a continuous basis.
June hogs rose 0.575 cent, to 80.825 cents.
The closely watched cash pork carcass cutout price was up 23 cents on Wednesday to $67.85/cwt.
The U.S. Department of Agriculture quoted average cash hog prices in the Iowa and southern Minnesota market up $1.64/cwt on Tuesday.
China’s agriculture ministry said late on Tuesday a new African swine fever outbreak has been confirmed in Sichuan province, in the country’s southwest, after a truck carrying pigs was stopped on a highway. China, home to the world’s largest hog herd, has now reported 112 outbreaks of the highly contagious disease in 28 provinces and regions.
“Rapidly rising domestic pork and hog prices suggest that supplies are tightening,” Arlan Suderman, chief commodities economist at INTL FCStone, said in a note to clients. “That gives hope to the U.S. industry that we could see escalated purchases in the weeks and months ahead.”
— Mark Weinraub is a Reuters commodities correspondent in Chicago.